The meaning of luxury is being redefined. In the past, a strong legacy, craftsmanship and exclusivity were often enough to set a brand apart. Today, those foundations still matter, but they no longer represent the full picture. Younger consumers increasingly seek out brands that reflect their values, understand their preferences, and offer experiences that feel personal and relevant. For automotive brands, particularly those with a long history, this isn’t an easy challenge.

The future of luxury lies in cultural relevance as much as product quality. And in an industry where trends and expectations are changing all the time, traditional brand planning is no longer sufficient. Brands now require sharper insights, better tools, and a deeper understanding of the context in which they compete. Bodo Philipp, CEO, MHP Consulting UK, explains why data, and increasingly, AI, must now sit at the center of brand strategy within the automotive industry.

Luxury Is No Longer Defined by Category

One of the most significant shifts is that luxury brands are no longer evaluated only against direct competitors. A car manufacturer may still share market space with other automotive brands, but in the eyes of the consumer, it is also being compared with fashion houses, wellness brands and tech platforms. Expectations are shaped by the best experiences people encounter, regardless of sector.

This broadens the competitive landscape considerably. It also raises the stakes. Consumers now expect a luxury brand not just to deliver on quality, but to express a point of view, offer meaningful experiences and reflect social and environmental awareness. The brand’s value lies not simply in the product, but in the story it tells and the way it makes people feel.

Research suggests a marked shift in consumption, with younger buyers placing far greater emphasis on brands that demonstrate sustainability and personal relevance – attributes that now shape consumer preferences well beyond traditional industry boundaries. BMW’s ‘Circular Economy’ approach, for instance, is a clear example of the ways in which some automotive brands are reframing their products, positioning themselves as an environmentally conscious brand to tap into this market.

For automotive businesses, this means adopting a more expansive approach to brand strategy. Benchmarking must look beyond the immediate surrounding industry. Understanding how other premium or luxury brands are connecting with their audiences, through service (and experience), storytelling, or sustainability, can help identify where the bar is being set, and how to meet or exceed it.

With Forbes claiming that 77% of Gen Z members would be willing to pay more for sustainably produced goods and services, and Bain reporting that Gen Z will account for 25-30% of the wider luxury market, it stands to reason that catering to these kinds of needs is extremely important for profitability and success for some.

Data and AI Help Brands Respond with Precision

As the market becomes more fluid, the ability to monitor shifts in sentiment and behaviour is increasingly important. Brands need to identify early signals before they appear in sales figures or press coverage. This is where data, supported by AI, can provide a genuine competitive advantage.

AI-powered tools can process vast volumes of unstructured information, detecting patterns in how consumers talk about materials, performance, design, or environmental impact. These insights can inform product development, brand positioning and communications strategy, helping brands move from reactive to predictive thinking. This approach has proven effective in collaborations with premium and luxury automotive brands seeking to translate cultural trends and consumer insights into clearer brand direction and more tailored customer experiences.

The same applies to understanding audience segments. Traditional methods for targeting established demographics are losing their edge in a world where values and behaviours often cut across age or income group. AI can support more nuanced segmentation, building up dynamic personas based on how people actually interact with the brand, what they search for, engage with, or choose to ignore.

But the value of this approach only becomes clear when insights are properly embedded in strategic decision-making. Data should not sit on the edges of the business. It needs to influence how teams plan, collaborate and measure success, ensuring that the brand evolves with clarity and consistency.

Distinctiveness Still Matters and Needs to Be Protected

While data and AI offer useful clarity, they do not replace human judgement. If brands rely on them too heavily, they risk falling into the same patterns – spotting the same signals, drawing the same conclusions, and responding in much the same way. Over time, the language, themes and ideas start to blur together. What makes a brand distinctive can be lost, replaced by a uniformity that leaves little to separate one from the other.

Luxury brands, by their nature, must stand for something. A car is not simply a means of transport. For some, it is an expression of identity, emotion and aspiration. The role of data is to help interpret what these ideas mean in today’s cultural and commercial context. It cannot supply the brand’s character; only help sharpen it. As Interbrand’s Best Global Brands report highlights, there aren’t many people who go out and buy a luxury car, such as a high-end Ferrari, because they need one. It is more of a desire than a need, driven by a strong and distinctive brand image that should never be sacrificed for short-term Optimisation.

There are also practical considerations at play. As data becomes more central to brand-building, compliance, governance and ethical transparency become important too. Regulatory frameworks such as GDPR and the EU AI Act place clear responsibilities on businesses using this technology. Luxury brands are expected not just to comply, but to lead, acting with discretion and integrity in how they use personal data and automation.

Conclusion

The luxury landscape is changing fast. It once relied on heritage and exclusivity, but now demands relevance, responsiveness and purpose. Consumers are looking for brands that not only deliver quality, but understand them, reflect their values, and move at their pace.

For automotive companies, this means thinking more strategically about how luxury brand reputations are built and maintained. AI and data do not replace creativity or instinct, but they help focus them, allowing teams to act with greater precision, consistency and foresight. Used well, these tools enable high-end automotive brands to stay culturally aware without becoming generic and beige.

Ultimately the luxury brands that succeed will be those that combine these data-driven insights with identity. They will know when to adapt, when to hold firm, and how to ensure that every decision – whether about product, message or experience – reinforces what makes them truly distinctive. In the new era of luxury, that balance will set the benchmark.

About the Author